Guest essay by Eric Worrall
According to Forbes, when renewable energy programmes like Germany’s Energiewende mature, demand for Russian fossil fuel will collapse.
Will Russia Survive The Coming Energy Transition?
Jun 27, 2019, 10:35am
Ariel Cohen Contributor
A new global energy reality is emerging. The era of the hydrocarbon – which propelled mankind through the second stage of the industrial revolution, beyond coal and into outer space – is drawing to a close. The stone age ended not because we ran out of stones. The same with oil and gas.
We have now entered the era of the renewable energy resource, whereby zero-emission electricity is generated via near unlimited inputs (solar radiation, wind, tides, hydrogen, and eventually, deuterium). Cutting-edge, smart electric grids, utility-scale storage, and electric self-driving vehicles – powered by everything from lithium-ion batteries to hydrogen fuel cells – are critical elements of this historic energy transition.
Each of these technological trends will displace demand for Russia’s primary source of budget revenues: fossil fuels.
The transition will have major consequences for the status-quo leaders of the hydrocarbon age: from Moscow to Caracas, and from Teheran to Riyadh. The Russian Federation, which today is the world’s largest gas exporter and second most prolific oil producer, is one such player which must ‘adapt or die’ over the next 15-20 years. Indeed, Russia derives 40% of its revenue from oil and gas sales, making it a de-facto petro-state. It, and other hydrocarbon revenue dependent nations, must accept their new reality, and react decisively, if they hope to survive in the age of renewables.
Even Germany, which is on the receiving end of Russia’s controversial Nord Stream II gas mega-project, has already declared that the purchases of Russian gas will start declining after 10 year’s time per its national Energy Transformation agenda. The so-called Energiewende policy aims to cut greenhouse gas emissions (GHG) some 40% by 2020, by 55% by 2030, and up to 95% in 2050, compared to 1990 levels. This does not jive with increased imports of Russian fossil fuels.
As we have already seen in Europe, hydrocarbon demand will be driven by declining renewable energy costs, government policies, new technologies, and companies’ shifts in strategies to prepare for the new energy age. Structural changes in fossil fuel supply, demand, energy mix, and prices will follow accordingly.
…Read more: https://www.forbes.com/sites/arielcohen/2019/06/27/will-russia-survive-the-coming-energy-transition/
Back in the real world post nuclear Germany, home of Energiewende, is so desperate for real energy they are preparing to tear down ancient forests in Hambach to get at the coal beneath the trees, and are using hardline police tactics to clear protesters from domestic brown coal mine sites.
The German government can declare whatever it wants, greens can celebrate their fantasy 15 year transition plans, but in the real world people do not tolerate being cold in Winter. Fossil fuel demand is rising, and demand for coal is strong.